Range is narrow. Market chops around.
The EURUSD is trading in a very narrow 46 pip trading range today. The 22 day average is about 106 pips. So there is room to roam.
The pair has found support today against the 100 hour MA (blue line in the chart above) in the slow move to the lows. An area of swing lows and highs are also in the area as is the 38.2% of the low to high trading range from last week (see chart above).
The pair bottomed on Monday, December 7th and peaked at 1.1042 after moving above the 200 day MA for a few hours before failing . On Friday, the 200 day MA was tested again, but the price quickly reversed. The 200 day MA is a key technical level in trading this week at 1.10313 currently. The 100 day MA at 1.10591 is also a level to eye. Do you think we can swing back above those key moving averages this week before the FOMC decision on Wednesday? The 1.11153 is the 50% of the move down from the October high (see chart below).
The Commitment of Traders speculative position report from the CME showed that the shorts fell by only 10K in the current week but still stands near the highest levels since May. This was despite the huge short covering rally from the ECB decision back on December 3rd. The implications is that there is that possibility of a continued short covering rally on a break higher. A move above the 100 and 200 day MA would likely be needed to ignite that spark. Be aware.
